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Five U.S. health care distributors said Tuesday that they have joined up to form a business-to-business Internet procurement exchange, which proliferate in other industries.

AmeriSource Health

(AAS)

,

Cardinal Health

(CAH) - Get Cardinal Health, Inc. Report

,

Fisher Scientific International

(FSH)

,

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McKesson HBOC

(MCK) - Get McKesson Corporation Report

and

Owens & Minor

(OMI) - Get Owens & Minor, Inc. Report

together will contribute more than $100 million in investments for the new exchange, which aims to streamline the process of buying and distributing health care products such as drugs, medical-surgical products and devices.

An independent company with its own management team and board of directors will be formed for the exchange, with chief executives of the founding companies to serve as directors. The joint venture agreement is expected to be completed by July, with the exchange ready to begin operating by the end of 2000.

Already, the founding members of the new exchange distribute products from nearly all suppliers and virtually every pharmaceutical, medical or laboratory product needed by caregivers, the companies said. "We believe the future of Internet commerce will be driven largely by established companies with proven infrastructures that can offer a more efficient online and offline solution," said Robert Walter, chairman and chief executive of Cardinal Health.

There has recently been much talk of the vast potential of the B2B market, with estimates ranging as high as $50 trillion. But now, with many B2B stocks trading substantially below their highs, a closer examination of the exchange business models make those projections look overblown or even

meaningless.